Mary Mitchell Dunn, Associate General Counsel
Credit Union National Association, Inc.
Suite 300
805 15th Street, N.W.
Washington, D.C.20005-2207
You have requested a legal opinion as to whether
and on what basis federal credit unions can include low-income
recipients of federal government benefits in their fields of membership.
A low-income individual may be eligible for credit union service
in a variety of ways as discussed below.
The Federal Credit Union Act, as amended by
the Credit Union Membership Access Act (CUMAA), recognizes three
types of credit unions defined in terms of their fields of membership:
single common bond, multiple common bond, and community credit
unions. 12 U.S.C. §1759(b). Unless low-income individuals
share the common bond of association or occupation that is the
basis of the field of membership of a single common bond credit
union, they will not be eligible to become a member. As you note
in your letter, these individuals will be able to join a community
credit if they are within the community that is the basis of the
field of membership.
A multiple group federal credit union can add
to its membership low-income individuals who want to open ETAs
in two ways. First, if the low-income individual is within a
select group within the credit union's field of membership, the
person is eligible for credit union membership. 12 U.S.C. §1759(b);
NCUA Chartering Manual, Chapter 2, Section IV.A.1. Second, if
the credit union has a low-income association in its field of
membership, low-income individuals who join the association are
eligible to join the credit union. NCUA Chartering Manual, Chapter
3, Section II.E.
There are two other ways in which low-income
individuals can receive federal credit union services. First,
all credit unions - single common bond, multiple common bond and
community credit unions -- can apply to add underserved areas
to their fields of membership without regard to the location of
the underserved area. The requirements and process for adding
an underserved area are set out in the NCUA Chartering Manual.
NCUA Chartering Manual, Chapter 3, Section IIl. Once added,
anyone in the underserved area is eligible to join the credit
union. Second, a credit union with a low-income designation can
open share accounts, including regular share, share certificate
Mary Mitchell Dunn
July 13, 1999
Page Two
and share draft accounts, for nonmembers.
12 U.S.C. §1757(6); 12 C.F.R. §§701.32. 701.34;
NCUA Chartering and Field of Membership Manual (Chartering Manual),
Chapter 3, Section II.B. Therefore, low-income individuals, who
are not otherwise eligible to join a low-income designated credit
union as a member, could still establish share accounts, including
electronic transfer accounts (ETAs), at a low-income designated
credit union. As nonmembers, however, they would not be eligible
to vote or hold office or for other credit union services, such
as loans.
We recognize, as you do, that statutory field
of membership requirements place some limitations on the ability
of federal credit unions to provide ETAs to low-income individuals;
however, within the limits of the Federal Credit Union Act and
the anticipated Treasury Department regulations, we believe that
many federal credit unions will be able and seek to offer these
accounts.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/MJMcK/SAA:bhs
SSIC 6010
99-0529